Conns Story

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CONN -- USA Stock  

USD 18.27  1.03  5.34%

Conns PPandE Turnover is quite stable at the moment as compared to the past year. The company's current value of PPandE Turnover is estimated at 13.04. Receivables Turnover is expected to rise to 2.66 this year, although the value of Net Income Per Employee will most likely fall to about 10.1 K. Conns Inc is scheduled to announce its earnings today. The next earnings report is expected on the 13th of April 2021. The stock is still going through an active downward rally. Although many conservative investors are getting more into consumer cyclical space, we should study Conns' latest fundamentals in more details. We will evaluate why we are still confident in anticipation of a recovery. Conns Inc current odds of financial distress is under 44 percent. Will institutional investors continue to be optimistic, or should we expect a sell-off?
Published over three months ago
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Should you exit your stake in Conns (NASDAQ:CONN)?
Conns has performance score of 2 on a scale of 0 to 100. The firm shows a Beta (market volatility) of 1.4585, which signifies a somewhat significant risk relative to the market. Let's try to break down what Conns's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Conns will likely underperform. Although it is extremely important to respect Conns Inc historical returns, it is better to be realistic regarding the information on equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Conns Inc technical indicators, you can presently evaluate if the expected return of 0.19% will be sustainable into the future. Conns Inc right now shows a risk of 4.63%. Please confirm Conns Inc semi variance, and the relationship between the treynor ratio and daily balance of power to decide if Conns Inc will be following its price patterns.
Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Conns income statement, its balance sheet, and the statement of cash flows. Potential Conns investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Conns investors may use each financial statement separately, they are all related. The changes in Conns's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Conns's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Conns fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Conns performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Conns shares is the value that is considered the true value of the share. If the intrinsic value of Conns is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Conns.
Please read more on our fundamental analysis page.

Are Conns Earnings Expected to grow?

The future earnings power of Conns involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Conns factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Conns stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Conns expected earnings.

How Conns utilizes its cash?

To perform a cash flow analysis of Conns, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Conns is receiving and how much cash it distributes out in a given period. The Conns cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Conns Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 498.6 Million

Conns Gross Profit

Conns Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Conns previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Conns Gross Profit growth over the last 10 years.
Please check Gross Profit in more details.

Conns exotic insider transaction detected

Legal trades by Conns insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Conns insider trading alert for general transaction of common stock by Douglas Martin, the corporate stakeholder, on 6th of April 2021. This event was filed by Conns Inc with SEC on 2021-04-06. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down a bit more

Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Conns is not uncomon. There are few distinct groups of Conns stakehholders that the SEC considers insiders. Investors usually gain information through their work as corporate directors, officers, or employees. If these individuals share the information with a friend, family, or business partner and the person who receives the information exchanges stock in the company, he or shie is also an insider. Let's take a look at how the ownership of Conns is distributed among investors.

Ownership Allocation

Conns holds a total of twenty-nine million one hundred thirty thousand outstanding shares. Over half of Conns Inc outstanding shares are owned by other corporate entities. These other corporate entities are typically referred to corporate investors that acquire positions in a given instrument to benefit from reduced trade commissions. Consequently, these institutions are subject to different rules and regulation than regular investors in Conns. Please watch out for any change in the institutional holdings of Conns Inc as this could mean something significant has changed or about to change at the company. Please note that no matter how much assets the company secures, if the real value of the firm is less than the current market value, you may not be able to make money on it.

Retail Investors
Retail Investors12.68
 2017 2018 2019 2020 (projected)
Long Term Debt to Equity2.041.451.641.42
Interest Coverage1.442.572.283.1

Asset Utilization

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Conns has an asset utilization ratio of 72.58 percent. This suggests that the company is making $0.73 for each dollar of assets. An increasing asset utilization means that Conns Inc is more efficient with each dollar of assets it utilizes for everyday operations.

Current Assets
Assets Non Current
967.1 M
Current Assets1.03 Billion51.02
Assets Non Current967.12 Million47.81
Tax Assets23.52 Million1.16

Our take on Conns to revert back

Latest treynor ratio is at 0.23. Conns Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Conns Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Conns future alpha.

The Current Takeaway on Conns Investment

Whereas some other companies in the specialty retail industry are either recovering or due for a correction, Conns may not be performing as strong as the other in terms of long-term growth potentials. To sum up, as of the 8th of December 2020, we believe that Conns is currently fairly valued with below average probability of distress in the next two years. Our primary 30 days buy-or-sell advice on the company is Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Conns Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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